Property ManagementHousing Sales Still Strong, Says NAHB
Sales of new single-family homes fell to a seasonally
adjusted annual rate of 911,000 units in February, down 2.4 percent from an
upwardly revised number in January, the Commerce Department reported today.
"The resilience of the nation"s housing market - as shown in today"s reports
on sales of both new and existing homes - is remarkable in light of the
lackluster performance of the broader economy and the downshift in consumer
confidence in the first quarter," said Bruce Smith, president of the
National Association of Home Builders (NAHB) and a home builder from Walnut
Creek, Calif. Total new and existing home sales hit a rate of 6.1 million
in February, off only 1.2 percent from the strong January pace.
Noting that any new-home sales figure above 900,000 is very strong on a
historic basis, Smith credited low rates on home mortgages for maintaining
buyer demand. The average interest rate on long-term, fixed-rate mortgages
was 7.05 percent in February, and has since glided below 7 percent.
As one of the economy"s most interest-sensitive sectors, housing benefits
and becomes an important stimulus when the Federal Reserve loosens monetary
policy as it has done three times in 2001. "It now appears that housing will
provide a positive contribution to economic growth in this year"s first
quarter," Smith said.
While some softening is likely in the housing market by mid-year, NAHB
surveys indicate that builders are relatively upbeat about sales prospects
in the coming six months. "The solid investment aspects of homeownership are
a likely factor supporting demand amid recent stock market travails," said
Smith.
Regionally, new-home sales were mixed in February. A double-digit gain in
the Northeast (20.3 percent) contrasted with a nearly 19 percent drop-off in
the Midwest, while the South and West posted marginal changes of +0.5
percent and -1.5 percent, respectively.
Indicating that supply and demand for new homes remain on an even keel, the
number of homes for sale was virtually unchanged in February from the
previous month at 311,000 -- a 4.1-month supply.